Silicon Valley Patent Office Stonewalled by Sequestration

A little over a month ago, Acting Director of the United States Patent and Trademark Office Teresa Stanek Rea announced that the opening of a Silicon Valley satellite office of the USPTO would be delayed, explaining: ”Given current budget constraints under sequestration, our efforts to move into permanent spaces for those three locations will be delayed, but continuing to operate from the temporary spaces and striving to grow our presence in the satellite office locations remains a top agency priority.”

The announcement came as a surprise to many since the satellite office expansions were supposed to be funded entirely based on patent fees collected by the USPTO, which amount to about $2.8 billion each year. Carl Guardino of the Silicon Valley Leadership Group, a public policy trade association, explained: “The Patent Office is funded through the fees that entrepreneurs and innovators pay into the patent system, so to say that we don’t have the money because of sequestration, there’s a lot of explaining to do.”

As it turns out, even fee-supported programs are not exempt from the across-the-board sequestration cuts, which could cost the USPTO close to $150 million. Among those unhappy with the cuts are a group of Silicon Valley Democrats–Mike Honda, Joe Lofgren, and Anna Eshoo–who introduced a bill to exempt the USPTO from sequestration. The bill was assigned to a committee on June 28, 2013, where it currently sits. The American Bar Association also expressed its disappointment in a letter to the Office of Management and Budget: “Most important to consider are the negative consequences that the sharp reduction in resources will have on the ability of our nation’s inventors and innovators to comply in a timely fashion with the requirements of our intellectual property laws, which are absolute prerequisites to the production and marketing of their inventions and innovations.”

A full satellite office is still planned for the Silicon Valley area with as many as 150 new examiners. This would be beneficial to entrepreneurs like Dave Clark, founder of high tech pet products startup Petzila, who explained that “It would be a godsend if we could meet with a patent examiner; it would cut our costs and time in half, and cut our anxiety by 60 percent. Nothing compares to a face-to-face conversation.”

Although the USPTO indicated that it “remain[s] committed to serving the public with permanent locations in all four continental U.S. time zones, ensuring that the full promise of the AIA is realized,” no timetable has been set for the project to resume.